BWT Annual Financial Statements 2005

... spun-off into Christ Water Technology comprising the industrial and municipal water treatment technology business meaning that these activities are included only for a period of 10 months in the BWT Group.

Consolidated sales for the BWT Group totaled €463.5 million in the 2005 financial year, 5% below the previous year’s figure of €488.1 million. The sales decline is attributed to the absence of sales in the "AST" – Aqua Systems Technologies segment for the final two months of the 2005 financial year following the spin-off of this segment. Growth in the AET segment slowed to 1% after several years of above-average growth.

EBIT increased, consolidated earnings at record level

In spite of the results of the AST segment, which was only consolidated for 10 months, earnings from operating activity (EBIT) and consolidated earnings after minority interests both performed positively in the 2005 financial year as compared with 2004. EBIT increased by 8.4% from €24.9 million to €27.0 million and consolidated earnings improved by 11.1% from €17.1 million to €19.0 million despite the loss of the important months of November and December in the AST segment.

In the AET segment, EBIT declined by 15.4% from €31.1 million to €26.3 million. This was the result of declining sales in France accompanied by capacity additions in servicing and extra costs associated with the spin-off of the AST segment (around €1.0 million). As expected, the industrial business in the "AST – Aqua Systems Technologies" segment achieved the turnaround. Until the spin-off of the business, that is to say the period January to October 2005, positive EBIT of €1.3 million was generated with customer-specific systems in the AST segment, in the 2004 financial year (January to December), a loss of €5.5 million was recorded here. Due to the sales decline, there was no improvement in EBIT in the FCMT segment, fundamental research and development work for special membranes for use in fuel cells were continued as planned and resulted in negative EBIT of €-0.7 million.

Healthy balance sheet structure – increased dividend

As a result of the operating cash flow (€26.4 million) and the spin-off of CHRIST, the net debt of the BWT Group has decreased from €74.7 million at the end of 2004 to €36.3 million on December 31, 2005. Consequently, gearing (net debt in relation to equity) improved from 53.9% to 38.9%. The Management Board is planning to propose to the Annual General Meeting that the dividend be increased to €0.30 per share (previous year: €0.27).

Outlook

Quoting Chairman of the Management Board of BWT, Andreas Weißenbacher: "Following the spin-off of the "AST – Aqua Systems Technologies" segment, the BWT – Best Water Technology – Group is to concentrate in future on developing, producing, marketing and servicing of series products for water treatment under the slogan "Safety, hygiene and health – BWT Water Technologies for a better Life". BWT’s management has declared its goals to be geographical expansion with increased growth beyond the European Union (primarily in the growth markets of Europe and Asia) as well as the expansion of the product range. The robust balance sheet situation and a strong cash flow form the financial basis for the successful implementation of our growth strategy."

An above-average sales and earnings increase in the "AET – Aqua Ecolife Technologies" segment is expected to be achieved in the second half of 2006. For the 2006 financial year as a whole, the BWT Group expects sales of €330 million and consolidated earnings in excess of €20 million following the spin-off of the "AST – Aqua Systems Technologies" segment.